Wall Street drifts in early trading as its momentum ebbs following a big run
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Wall Street drifts in early trading as its momentum ebbs following a big run
NEW YORK (AP) — U.S. stock indexes are drifting in early trading, as Wall Street’s momentum ebbs following its big run over the last six months. The S&P 500 was down 0.1% early Wednesday, coming off its worst day in four weeks. The Dow Jones Industrial Average slipped 11 points, and the Nasdaq composite was off 0.3%. Intel sank after disclosing details about several key parts of its business for the first time. Cal-Maine Foods rose after reporting stronger profit for the latest quarter than expected by selling a record number of eggs. Treasury yields rose in the bond market.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street shifted between small gains and losses in premarket trading Wednesday, a day after anxiety over the potential for fewer interest rate cuts dragged markets to their worst day in weeks.
Dow futures rose less than 0.1% before the bell, while S&P 500 futures fell less than 0.1%.
Traders have already drastically reduced their expectations for how many times the Federal Reserve will cut interest rates this year, halving them from a forecast of six at the start of the year. That would be in line with the three cuts that Fed officials themselves have hinted at.
Because the U.S. economy — and particularly the labor market — has remained stronger than expected, the chances are rising that the Fed may deliver just two rate cuts this year. The Fed raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to crush the persistent inflation that arose during the COVID-19 pandemic.
While prices have eased considerably in the past two years, the U.S. economy keeps showing signs that it remains healthy. So much so that Fed officials remain concerned about reigniting inflation with rushed rate cuts.
In Europe, inflation that has squeezed consumers there fell more than expected in March to 2.4%, but analysts say that might not be enough to move up the ECB’s first interest rate cut.
The latest U.S. inflation reports, covering both the wholesale and consumer levels, are due out next week.
In equities trading, egg producer Cal-Maine Foods jumped 7% after it easily beat third-quarter profit targets as demand for eggs, especially during the holidays, remained strong.
Intel shares slid 4.7% after the chipmaker outlined a new financial reporting structure and provided recast operating segment financial results for the past three years. The California company reported that its foundry, or manufacturing segment, lost $7 billion in 2023. Intel is one of the few chipmakers to make their own chips and did not previously break out those numbers in its financial reporting.
In Europe at midday, France’s CAC 40 and Germany’s DAX each rose 0.2% and Britain’s FTSE 100 fell 0.3%.
Japan’s benchmark Nikkei 225 slid 0.8% in morning trading to 39,511.88. Sydney’s S&P/ASX 200 slipped 1.3% to 7,782.50. South Korea’s Kospi dropped 1.4% to 2,714.18. Hong Kong’s Hang Seng lost 1.1% to 16,753.82, while the Shanghai Composite fell 0.2% to 3,070.04.
Analysts said worries were growing that anxieties that rattled Wall Street might spread to Asia, despite recent relatively positive economic signs from China.
“Investors are grappling with the possibility that this turbulence could mark the beginning of a more significant correction in the markets,” said Stephen Innes, managing partner at SPI Asset Management.
China has set an ambitious target of around 5% economic growth this year, seeking to move past recent troubles in the property sector and the lingering effects of pandemic-era disruptions.
A new report from Moody’s Ratings said China’s slowing economy will aggravate difficult business conditions for Japanese manufacturers in the next year to year and a half.
“China is an important market for Japanese manufacturers of factory automation and other industrial equipment, automotive parts, and elevator and escalator systems. A decline in Chinese demand would weigh on the companies’ overall earnings and cash flow,” it said.
In energy trading, benchmark U.S. crude added 85 cents to $86 a barrel. Brent crude, the international standard, rose 88 cents to $89.80 a barrel.
In currency trading, the U.S. dollar rose to 151.79 Japanese yen from 151.54 yen. The euro cost $1.0784, up from $1.0776.
